Found Money
One of the truths I’ve learned that I try to impart to others is that there are always more options than we realize. I see so many people beat themselves over the head deciding between two options. My advice? Look for the third way! There are always more choices.
Dr. Phil had a show this week regarding money problems. He pointed out a list of mistakes people make. Two at the top of the list were things I wholeheartedly agree with. One, don’t fall for the myth of fixed income. There are always ways to change your income. Two, don’t fall for the myth of fixed expenses. Your budget has more room for change than you realize. He had a whole, ranked list. Without getting off into the weeds of how he listed these, I think these are for sure two of the most common mistakes simply because they epitomize what I advise against… failing by choosing from a list of wrong options.
For example, if you’re paid salary and you make $45,000 per year, and say that lets you save $6,000 a year. But, you’re saving for a house and you need to turn that into $12,000. What do you do? If you’re like most people, you’ll probably borrow the difference. The options are get a new job, forget the purchase, or borrow the money, right? How many options can you think of? Even if you think beyond what’s listed, where do you stumble? 5 options? 7? There are a myriad of ways to actually earn the difference! Why not sell items on eBay? Why not pick a hobby that you know something about and sell information online? Why not moonlight in your chosen field? There are thousands of legit, home-based business ideas that you could probably never be able to quit your day job by doing, but from which you can make a serious and real profit. If you watch television, you have the time. You can increase your income without a raise and without changing jobs. It takes a little motivation and discipline.
As another example regarding expenses… this one hits home to me. There are people who hit truly hard times. But to me it is radical and unnerving what is considered “poor” in this day and age. People ask presidential candidates what is considered “rich.” I want to know, what is considered poor? If you have food, shelter, transportation, clothing, and even entertainment, is that poor? Why would someone who claims to not be able to afford health insurance or food own a television or stereo? The sense of entitlement people have to luxuries that they meet before basic needs is appalling. However, while very real, those are extreme examples. More common are people who simply live from paycheck to paycheck, fearful that one wrong move could destroy them. Yet, they do not see a way out. They have credit card bills, car payments, household bills, and more. If you ask them, they can’t save a dime, and it takes all they have to meet these obligations. My question is this… if you are in a long-term situation of living paycheck to paycheck, why have a car payment? You can get by with a $1000 car when the chips are down. Do you eat out AT ALL? One restaurant bill buys a lot of groceries. What things do you need, and which ones are luxuries? Ask yourself this, “If I had no one to depend on and bail me out, what would I do to save myself?” You know, some people are in that boat. Don’t think about being bailed-out as a possibility.
Of course, there are those who are upside down in things who are saying, “But selling my car makes no sense. I owe more than it’s worth. I have to keep paying.” Same for the credit cards. You can’t just go sell all your stuff and hope to get the money you need. Now, I still contend your budget is workable, and that ANY luxury that comes before paying off a major debt is foolish. But it does outline a principle. Spending a dollar is like burning a log. You physically cannot create or destroy energy. Similarly, you can’t magically negate the value represented by a dollar. If you burn a log, you get light and heat. If you spend a dollar, you get something of equivalent value. The problem is you can’t immediately reverse the process by using light and heat to make a log. And, you can’t use something you bought to immediately turn back into the same dollar. Thus, if you burn more wood than you need and produce more light and heat than you need, you may find yourself short another, much darker and colder day. Same goes for your money. You may have a lot of things of value, but you’re not going to be able to convert depreciating assets into needed cash. Buying something that you don’t need has both an immediate AND long-term cost.
For the capital survivalist, just like all survivalists, less is more. And, you can do more with what you already have if you expand your mind.
Jared A. Chambers
